Earnings release
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For immediate release TOROMONT ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2025 AND QUARTERLY DIVIDEND Toronto, Ontario (April 30, 2025 ) – Toromont Industries Ltd. (TSX: TIH) today reported its financial results for the first quarter ended March 31, 2025. Three months ended March 31 ($ millions, except per share amounts) 2025 2024 % change Revenue $ 1,089.6 $ 1,016.3 7 % Operating income $ 98.5 $ 106.6 (8) % Net earnings $ 74.4 $ 83.9 (11) % Basic earnings per share ("EPS") $ 0.92 $ 1.02 (10) % "I am pleased with the performance of the team in the quarter. In a somewhat challenging market, we had consolidated revenue growth of 7% overall with growth in both the Equipment Group and CIMCO. Although we did not match our bottom-line performance from last year, due largely to business mix and lower interest income, the team managed expenses very well and enhanced our already solid financial position," stated Michael S. McMillan, President and Chief Executive Officer of Toromont Industries Ltd. "The Equipment Group executed well with improved new equipment deliveries in construction, mining and power segments. Rental markets improved slightly in the first quarter, reflecting the larger fleet. CIMCO revenue and bottom-line improvements demonstrated the team's strong execution while we continued to exercise disciplined capital management." HIGHLIGHTS: Consolidated Results • Revenue increased $73.3 million (up 7%) to $1.1 billion for the quarter. Revenue increased in both groups, with the Equipment Group up 7% and CIMCO up 9% compared to 2024. Growth reflects higher new equipment sales and solid execution against order backlog. Rental revenue improved on higher utilization in a slower market, while used equipment sales were lower. Product support revenue decreased in the Equipment group with lower parts demand, which was partially offset by higher product support at CIMCO. Our moderate growth in technician labour workforce continues to reflect our long-term strategic objectives. • Operating income decreased 8% in the quarter, and was 9.0% of revenue compared to 10.5% in the similar period last year. Although revenue was higher, lower gross margins in the Equipment Group (unfavourable sales mix and a strong comparator) and slightly higher expenses dampened results. • For the quarter, net earnings decreased $9.5 million or 11% to $74.4 million compared to the similar period last year. EPS was $0.92 (basic) and $0.91 (fully diluted), 10% lower compared to last year. • Bookings(1) decreased 12% compared to the similar period last year. Equipment Group bookings decreased mainly reflecting lower mining orders versus a strong comparable last year, which included several large 1
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orders. CIMCO bookings decreased reflective of the cautious tone related to economic uncertainty resulting in delays in customer buying decisions, with lower new orders in both markets and regions. Booking activity can be lumpy, resulting in variability quarter over quarter, reflecting market-related factors and customer buying patterns. • Backlog(1) of $1.3 billion as at March 31, 2025 , was down slightly from $1.4 billion as at March 31, 2024 . Backlog remains healthy, reflecting deliveries and progress on construction schedules. Backlog includes a $230.0 million order book at the acquired company, which is expected to deliver over the next two years. Equipment Group • Revenue was up $65.2 million or 7% to $993.3 million for the quarter. New equipment sales increased 24% on good deliveries in mining and power systems. Rental activity increased 11%, with higher light equipment rentals and rentals with a purchase option. Lower used equipment sales (-21%) and product support revenues (-3%) reflect cautious end customer demand and activity levels. • Operating income decreased $9.9 million or 10% to $88.9 million in the quarter. Higher revenue was more than offset by lower gross margins and slightly higher expenses. Operating income margin decreased to 8.9% versus 10.6% in the comparable period last year, primarily reflecting lower gross margins related to changes in sales mix. • Bookings in the first quarter of 2025 were $501.9 million, a decrease of $19.7 million or 4% versus the prior year, reflecting lower mining orders against a strong comparable, which included several large customer orders. Power system orders were healthy and construction orders increased modestly compared to the prior period. • Backlog of $982.0 million at the end of March 2025 was lower by $102.7 million or 9% from the end of March 2024. Backlog includes $230.0 million order backlog at the acquired company. Excluding this, backlog was 32% lower compared to the same time last year, reflecting good deliveries against customer orders over the last twelve months. • As previously announced, on January 31, 2025, the Company acquired 60% of the shares of AVL Manufacturing Inc. ("AVL") for consideration of $67.5 million cash plus the issuance of 110.4 thousand Toromont shares ($12.8 million). In addition, the Company has committed to purchase the remaining 40% at various dates through to 2031. The initial cash consideration of the purchase was funded with cash on hand. AVL is a leader in the design and fabrication of power generation and storage enclosures. AVL has operations in Hamilton, Ontario and currently serves the data centre market across eastern North America. The Company has not yet finalized its determination of fair value of the assets acquired and liabilities assumed. The acquisition, while accretive, is not expected to have an overall material impact on Toromont’s combined revenue, earnings or balance sheet in the near-term. CIMCO • Revenue increased $8.1 million or 9% to $96.3 million for the quarter. Package revenue was up 15% on good execution on project construction in both Canada (+14%) and the US (+17%). Product support activity increased 5%, with higher activity in both Canada and in the US reflecting good execution. 2
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• Operating income was up $1.8 million or 23% to $9.6 million for the quarter, reflecting improved gross margins and higher revenue. Operating income margin increased to 10.0% (2024 – 8.9%) reflecting higher gross margins again on good execution. • Bookings decreased 54% to $47.7 million in the first quarter of 2025. Both markets and regions were lower, reflective of the lumpy nature of project bookings and the current economic uncertainty causing delays in customer buying decisions. • Backlog of $347.7 million as at March 31, 2025 was up $24.5 million or 8% from March 2024. Backlog in the US was strong, up 54% from this time last year, while backlog in Canada was down 12%. Financial Position • During the quarter, and in advance of an upcoming debt maturity in September 2025, the Company issued $300 million senior debentures, maturing in 2030 and bearing interest of 3.76%. • Toromont's share price of $112.63 at the end of March 2025, translated to a market capitalization (1) of $9.2 billion and a total enterprise value(1) of $9.1 billion. • The Company maintained a strong financial position. Leverage as represented by the net debt to total capitalization(1) ratio was -1% at the end of March 2025, compared to -9% at the end of December 2024 and -14% at the end of March 2024. The change in ratio from this time last year reflects continuing cash inflow from operations, more than offset by investment in working capital, capital expenditures and two business acquisitions. • The Company purchased and cancelled 204,900 common shares for $25.2 million under the Normal Course Issuer Bid program in the three-month ended March 31, 2025 ( 195,700 common shares for $25.0 million in 2024). • The Board of Directors approved the regular quarterly dividend of $0.52 cents per share, payable on July 3, 2025 to shareholders on record on June 6, 2025. • The Company's return on equity (1) was 18.5% at the end of March 2025, o n a t r a i l i n g t w e l v e - m o n t h b a s i s , compared to 19.2% at the end of December 2024 and 22.0% at the end of March 2024. Trailing t w e l v e - m o n t h p r e - t a x r e t u r n o n c a p i t a l e m p l o y e d(1) was 24.1% at the end of March 2025, compared to 25.7% at the end of December 2024 and 29.0% at the end of March 2024. "We continue to be mindful of the variability due to the uncertain economic and political environment and are monitoring and focusing on controllables," stated John M. Doolittle, Executive Vice President and Chief Financial Officer of Toromont Industries Ltd. "The challenging and changing trade related announcements between the US and Canada have created additional economic turbulence for every company engaged in cross border trade. Our team is engaged, monitoring and developing an appropriate action plan to navigate the potential impacts over the short and longer term when details become available. W e will maintain our focus on operating and financial disciplines to manage our cost structure, while we invest in capacity and capabilities to provide exceptional service to our customers today and in the future . The strong order backlog and improved operating disciplines, along with our strong financial position, position us well for the future." 3
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FINANCIAL AND OPERATING RESULTS All comparative figures in this press release are for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 . All financial information presented in this press release has been prepared in accordance with International Financial Reporting Standards ("IFRS"), except as noted below, and are reported in Canadian dollars. This press release contains only selected financial and operational highlights and should be read in conjunction with Toromont's unaudited interim condensed consolidated financial statements and related notes and Management's Discussion and Analysis ("MD&A"), as at and for the three months ended March 31, 2025 , which are available on SEDAR at www.sedarplus.ca and on the Company's website at www.toromont.com. Additional information is contained in the Company's filings with Canadian securities regulators, including the 2024 Annual Report and 2025 Annual Information Form, which are available on SEDAR and the Company's website. ANNUAL GENERAL MEETING OF SHAREHOLDERS The Company will be holding its Annual General Meeting of Shareholders at the Novotel Toronto Vaughan Centre, Concord Room, 200 Bass Pro Mills Drive Vaughan, Ontario, on Thursday, May 1, 2025, at 10:00 a.m. (EDT). For those unable to attend in-person, a recording of the meeting will be available through a link on Toromont's website at: www.toromont.com. QUARTERLY CONFERENCE CALL AND WEBCAST Interested parties are invited to join the quarterly conference call with investment analysts, in listen-only mode, on Thursday, May 1, 2025 at 8:00 a.m. (EDT). The call may be accessed by telephone at 1 - 8 8 8 - 6 9 9 - 1 1 9 9 (North American toll free) or 416-945-7677 (Toronto area). A replay of the conference call will be available until Thursday, May 8, 2025 by c alling 1 -888-660-6345 (North American toll free) or 289-819-1450 (Toronto area) and quoting passcode 68383#. The live webcast can also be accessed at www.toromont.com. Presentation materials to accompany the call will be available on our website. NON-GAAP AND OTHER FINANCIAL MEASURES Management believes that providing certain non-GAAP measures provides users of the Company's unaudited interim condensed consolidated financial statements and MD&A with important information regarding the operational performance and related trends of the Company's business. By considering these measures in combination with the comparable IFRS measures set out below, management believes that users are provided a better overall understanding of the Company's business and its financial performance during the relevant period than if they simply considered the IFRS measures alone. The non-GAAP measures used by management do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Accordingly, these measures should not be considered as a substitute or alternative for net income or cash flow, in each case as determined in accordance with IFRS. 4
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Management also uses key performance indicators to enable consistent measurement of performance across the organization. These KPIs are non-GAAP financial measures, do not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. Gross Profit / Gross Profit Margin Gross Profit is defined as total revenue less cost of goods sold. Gross Profit Margin is defined as gross profit (defined above) divided by total revenue. Operating Income / Operating Income Margin Operating income is defined as net earnings from operations before interest expense, interest and investment income and income taxes and is used by management to assess and evaluate the financial performance of its operating segments. Financing and related interest charges cannot be attributed to business segments on a meaningful basis that is comparable to other companies. Business segments do not correspond to income tax jurisdictions and it is believed that the allocation of income taxes distorts the historical comparability of the performance of the business segments. Operating income margin is defined as operating income (defined above) divided by total revenue. Three months ended March 31 ($ thousands) 2025 2024 Net earnings $ 74,436 $ 83,919 plus: Interest expense 7,446 6,994 less: Interest and investment income (11,179) (15,687) plus: Income taxes 27,782 31,359 Operating income $ 98,485 $ 106,585 Total revenue $ 1,089,622 $ 1,016,349 Operating income margin 9.0% 10.5% Net Debt to Total Capitalization/Equity Net debt to total capitalization/equity are calculated as net debt divided by total capitalization and shareholders' equity, respectively, as defined below, and are used by management as measures of the Company’s financial leverage. Net debt is calculated as long-term debt plus current portion of long-term debt less cash and cash equivalents. Total capitalization is calculated as shareholders' equity plus net debt. 5
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The calculations are as follows: March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Long-term debt $ 795,683 $ 498,518 $ 647,964 Current portion of long-term debt 149,941 149,910 — less: Cash and cash equivalents 977,461 890,815 983,355 Net debt (31,837) (242,387) (335,391) Shareholders' equity 2,972,561 2,955,393 2,754,769 Total capitalization $ 2,940,724 $ 2,713,006 $ 2,419,378 Net debt to total capitalization (1)% (9)% (14)% Net debt to equity (0.01):1 (0.08):1 (0.12):1 Market Capitalization & Total Enterprise Value Market capitalization represents the total market value of the Company's equity. It is calculated by multiplying the closing share price of the Company's common shares by the total number of common shares outstanding. Total enterprise value represents the total value of the Company and is often used as a more comprehensive alternative to market capitalization. It is calculated by adding debt/net debt (defined above) to market capitalization. The calculations are as follows: March 31 December 31 March 31 ($ thousands, except for shares and share price) 2025 2024 2024 Outstanding common shares 81,262,767 81,300,574 82,213,286 times: Ending share price $ 112.63 $ 113.64 $ 130.35 Market capitalization $ 9,152,625 $ 9,238,997 $ 10,716,502 Long-term debt $ 795,683 $ 498,518 $ 647,964 Current portion of long-term debt 149,941 149,910 — less: Cash and cash equivalents 977,461 890,815 983,355 Net debt $ (31,837) $ (242,387) $ (335,391) Total enterprise value $ 9,120,788 $ 8,996,610 $ 10,381,111 Order Bookings and Backlog Order bookings represent the retail value of firm equipment or project orders received during a period. Backlog is defined as the retail value of equipment units ordered by customers with future delivery, and the remaining retail value of package/project orders remaining to be recognized in revenue under the percentage of completion method. Management uses order backlog as a measure of projecting future equipment and project deliveries. There are no directly comparable IFRS measures for order bookings or backlog. 6
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Return on Capital Employed ("ROCE") ROCE is utilized to assess both current operating performance and prospective investments. The adjusted earnings numerator used for the calculation is income before income taxes, interest expense and interest income (excluding interest on rental conversions). The denominator in the calculation is the monthly average capital employed, which is defined as net debt plus shareholders' equity, also referred to as total capitalization, adjusted for discontinued operations. Trailing twelve months ended March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Net earnings $ 497,033 $ 506,516 $ 522,627 plus: Interest expense 29,107 28,655 28,188 less: Interest and investment income (49,129) (53,637) (51,383) plus: Interest income – rental conversions 4,528 3,635 3,684 plus: Income taxes 185,061 188,638 191,111 Adjusted net earnings $ 666,600 $ 673,807 $ 694,227 Average capital employed $ 2,763,165 $ 2,621,627 $ 2,396,373 Return on capital employed 24.1% 25.7% 29.0% Return on Equity ("ROE") ROE is monitored to assess profitability and is calculated by dividing net earnings by opening shareholders' equity (adjusted for shares issued and shares repurchased and cancelled during the period), both calculated on a trailing twelve month period. Trailing twelve months ended March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Net earnings $ 497,033 $ 506,516 $ 522,627 Opening shareholder's equity (net of adjustments) $ 2,689,760 $ 2,636,834 $ 2,374,586 Return on equity 18.5% 19.2% 22.0% ADVISORY Information in this press release that is not a historical fact is "forward-looking information". Words such as "plans", "intends", "outlook", "expects", "anticipates", "estimates", "believes", "likely", "should", "could", "would", "will", "may" and similar expressions are intended to identify statements containing forward-looking information. Forward-looking information in this press release reflects current estimates, beliefs, and assumptions, which are based on Toromont’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Toromont's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Toromont can give no assurance that such estimates, beliefs and assumptions will prove to be correct. 7
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Numerous risks and uncertainties could cause the actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: business cycles, including general economic conditions in the countries in which Toromont operates; new tariffs and counter-tariffs imposed on cross-border trade, commodity price changes, including changes in the price of precious and base metals; inflationary pressures; potential risks and uncertainties relating to a potential new world health issue; increased regulation of or restrictions placed on our businesses; changes in foreign exchange rates, including the Cdn$/US$ exchange rate; the termination of distribution or original equipment manufacturer agreements; equipment product acceptance and availability of supply, including reduction or disruption in supply or demand for our products stemming from external factors; increased competition; credit of third parties; additional costs associated with warranties and maintenance contracts; changes in interest rates; the availability and cost of financing; level and volatility of price and liquidity of Toromont's common shares; potential environmental liabilities and changes to environmental regulation; information technology failures, including data or cybersecurity breaches; failure to attract and retain key employees as well as the general workforce; damage to the reputation of Caterpillar, product quality and product safety risks which could expose Toromont to product liability claims and negative publicity; new, or changes to current, federal and provincial laws, rules and regulations including changes in infrastructure spending; any requirement to make contributions or other payments in respect of registered defined benefit pension plans or postemployment benefit plans in excess of those currently contemplated; increased insurance premiums; and risk related to integration of acquired operations including cost of integration and ability to achieve the expected benefits. Readers are cautioned that the foregoing list of factors is not exhaustive. Any of the above mentioned risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied in the forward-looking information and statements included herein. For a further description of certain risks and uncertainties and other factors that could cause or contribute to actual results that are materially different, see the risks and uncertainties set out under the heading "Risks and Risk Management" and "Outlook" sections of Toromont's most recent annual Management Discussion and Analysis, as filed with Canadian securities regulators at www.sedarplus.ca or at our website www.toromont.com. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those e x p r e s s e d o r i m p l i e d b y s t a t e m e n t s c o n t a i n i n g f o r w a r d - l o o k i n g i n f o r m a t i o n . Readers are cautioned not to place undue reliance on statements containing forward-looking information, which reflect Toromont's expectations only as of the date of this press release, and not to use such information for anything other than their intended purpose. Toromont disclaims any obligation to update or revise any f o r w a r d - l o o k i n g i n f o r m a t i o n , w h e t h e r a s a r e s u l t o f n e w i n f o r m a t i o n , f u t u r e e v e n t s o r o t h e r w i s e , e x c e p t a s required by law. ABOUT TOROMONT Toromont Industries Ltd. operates through two business segments: the Equipment Group and CIMCO. The Equipment Group includes one of the larger Caterpillar dealerships by revenue and geographic territory, spanning the Canadian provinces of Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Québec, Ontario and Manitoba, in addition to most of the territory of Nunavut. The Equipment Group includes industry-leading rental operations and a complementary material handling business. CIMCO is one of North America's leading suppliers of thermal management solutions that enable customers to reduce energy consumption and emissions, use natural refrigerants, and monitor and control their operating environments autonomously. Both segments offer comprehensive product support capabilities. This press release and more information about Toromont Industries Ltd. can be found at www.toromont.com. 8
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For more information contact: John M. Doolittle Executive Vice President and Chief Financial Officer Toromont Industries Ltd. Tel: 416-514-4790 FOOTNOTE (1) These financial metrics do not have a standardized meaning under International Financial Reporting Standards (IFRS), which are also referred to herein as Generally Accepted Accounting Principles (GAAP), and may not be comparable to similar measures used by other issuers. These measurements are presented for information purposes only. The Company's Management's Discussion and Analysis (MD&A) includes additional information regarding these financial metrics, including definitions and a reconciliation to the most directly comparable GAAP measures, under the headings "Additional GAAP Measures", "Non-GAAP Measures" and "Key Performance Indicators." 9
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TOROMONT INDUSTRIES LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three months ended March 31 ($ thousands, except share amount) 2025 2024 Revenue $ 1,089,622 $ 1,016,349 Cost of goods sold 846,047 766,175 Gross profit 243,575 250,174 Selling and administrative expenses 145,090 143,589 Operating income 98,485 106,585 Interest expense 7,446 6,994 Interest and investment income (11,179) (15,687) Income before income taxes 102,218 115,278 Income taxes 27,782 31,359 Net earnings $ 74,436 $ 83,919 Earnings per share Basic $ 0.92 $ 1.02 Diluted $ 0.91 $ 1.01 Weighted average number of shares outstanding Basic 81,311,867 82,309,309 Diluted 81,852,574 82,975,125 10
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MANAGEMENT'S DISCUSSION AND ANALYSIS This Management's Discussion and Analysis ("MD&A") comments on the operations, performance and financial condition of Toromont Industries Ltd. ("Toromont" or the "Company") as at and for the three months ended March 31, 2025 , compared to the preceding year. This MD&A should be read in conjunction with the unaudited interim condensed consolidated financial statements and related notes for the three months ended March 31, 2025, the annual MD&A contained in the 2024 Annual Report and the audited annual consolidated financial statements for the year ended December 31, 2024. The unaudited interim condensed consolidated financial statements reported herein have been prepared in accordance with International Accounting Standard ("IAS") 34 – Interim Financial Reporting, and are reported in Canadian dollars. The information in this MD&A is current to April 30, 2025. Additional information is contained in the Company's filings with Canadian securities regulators, including the Company's 2024 Annual Report and the 2025 Annual Information Form. These filings are available on SEDAR at www.sedarplus.ca and on the Company’s website at www.toromont.com. Use of Non-IFRS Financial Measures The MD&A presents certain financial and operating performance measures that management believes provide meaningful information in assessing Toromont's underlying performance. Readers are cautioned that these measures may not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Accordingly, non-IFRS or non-Generally Accepted Accounting Principles ("GAAP") measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Definitions and a reconciliations of the Company's non-IFRS or non-GAAP measures are included in the "Additional GAAP Measures", "Non-GAAP Measures" and "Key Performance Indicators" sections of this report. Forward-Looking Information Information in this MD&A that is not a historical fact is "forward-looking information". Words such as "plans", "intends", "outlook", "expects", "anticipates", "estimates", "believes", "likely", "should", "could", "would", "will", "may" and similar expressions are intended to identify statements containing forward-looking information. Forward-looking information in this MD&A reflects current estimates, beliefs, and assumptions, which are based on Toromont’s perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Toromont's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and as such, are subject to change. Toromont can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Numerous risks and uncertainties could cause the actual results to differ materially from the estimates, beliefs and assumptions expressed or implied in the forward-looking statements, including, but not limited to: business cycles, including general economic conditions in the countries in which Toromont operates; new tariffs and counter-tariffs imposed on cross-border trade, commodity price changes, including changes in the price of precious and base metals; inflationary pressures; potential risks and uncertainties relating to a potential new world health issue; increased regulation of or restrictions placed on our businesses; changes in foreign exchange rates, including the Cdn$/US$ exchange rate; the termination of distribution or original equipment manufacturer agreements; equipment product acceptance and availability of supply, including reduction or disruption in supply or demand for our products stemming from external factors; increased competition; credit of third parties; additional costs associated with warranties and maintenance contracts; changes in interest TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 1 Toromont Industries Ltd. — Q1 2025 Interim Report
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rates; the availability and cost of financing; level and volatility of price and liquidity of Toromont's common shares; potential environmental liabilities and changes to environmental regulation; information technology failures, including data or cybersecurity breaches; failure to attract and retain key employees as well as the general workforce; damage to the reputation of Caterpillar, product quality and product safety risks which could expose Toromont to product liability claims and negative publicity; new, or changes to current, federal and provincial laws, rules and regulations including changes in infrastructure spending; any requirement to make contributions or other payments in respect of registered defined benefit pension plans or postemployment benefit plans in excess of those currently contemplated; increased insurance premiums; and risk related to integration of acquired operations including cost of integration and ability to achieve the expected benefits. Readers are cautioned that the foregoing list of factors is not exhaustive. Any of the above mentioned risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied in the forward-looking information and statements included herein. For a further description of certain risks and uncertainties and other factors that could cause or contribute to actual results that are materially different, see the risks and uncertainties set out under the heading "Risks and Risk Management" and "Outlook" sections of Toromont's most recent annual Management Discussion and Analysis, as filed with Canadian securities regulators at www.sedarplus.ca or at our website www.toromont.com. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those e x p r e s s e d o r i m p l i e d b y s t a t e m e n t s c o n t a i n i n g f o r w a r d - l o o k i n g i n f o r m a t i o n . Readers are cautioned not to place undue reliance on statements containing forward-looking information, which reflect Toromont's expectations only as of the date of this MD&A, and not to use such information for anything other than their intended purpose. Toromont disclaims any obligation to update or revise any f o r w a r d - l o o k i n g i n f o r m a t i o n , w h e t h e r a s a r e s u l t o f n e w i n f o r m a t i o n , f u t u r e e v e n t s o r o t h e r w i s e , e x c e p t a s required by law. BUSINESS COMBINATION On January 31, 2025, the Company acquired 60% of the shares of AVL Manufacturing Inc. ("AVL") for consideration of $67.5 million cash plus the issuance of 110.4 thousand Toromont shares. In addition, the Company has committed to purchase the remaining 40% at various dates through to 2031. The initial purchase price was funded with cash on hand. AVL is a leader in the design and fabrication of power generation and storage enclosures. AVL has operations in Hamilton, Ontario and currently serves the data centre market across eastern North America. The Company has not yet finalized its determination of fair value of the assets acquired and liabilities assumed. The acquisition, while accretive, is not expected to have an overall material impact on Toromont's combined revenue, earnings or statement of financial position in the near-term. The acquisition was accounted for as a business combination and the results of AVL have been included in the Equipment Group from the date of acquisition. For further information, refer to note 3 "Business Combination" in the notes to the interim condensed consolidated financial statements. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 2 Toromont Industries Ltd. — Q1 2025 Interim Report
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CONSOLIDATED OPERATING RESULTS ($ thousands, except per share amounts) 2025 2024 $ change % change REVENUE $ 1,089,622 $ 1,016,349 $ 73,273 7 % Cost of goods sold 846,047 766,175 79,872 10 % Gross profit (1) 243,575 250,174 (6,599) (3) % Selling and administrative expenses 145,090 143,589 1,501 1 % OPERATING INCOME (1) 98,485 106,585 (8,100) (8) % Interest expense 7,446 6,994 452 6 % Interest and investment income (11,179) (15,687) 4,508 (29) % Income before income taxes 102,218 115,278 (13,060) (11) % Income taxes 27,782 31,359 (3,577) (11) % NET EARNINGS $ 74,436 $ 83,919 $ (9,483) (11) % BASIC EARNINGS PER SHARE $ 0.92 $ 1.02 $ (0.10) (10) % KEY RATIOS: Gross profit margin (1) 22.4% 24.6% Selling and administrative expenses as a % of revenue 13.3% 14.1% Operating income margin (1) 9.0% 10.5% Income taxes as a % of income before income taxes 27.2% 27.2% (1) Described in the sections titled "Additional GAAP Measures", "Non-GAAP Measures" and "Key Performance Measures". Profitability for the first quarter of 2025 was lower than the first quarter of 2024, as expected, given the current economic environment. Uncertain market conditions led to cautious end customer purchasing decisions. Higher revenue was generated by both the Equipment Group and CIMCO with new equipment deliveries and execution against order backlog and project schedules. Rental revenue improved during the period, however utilization levels remained lower than prior year. Product support revenue was lower overall with an increase at CIMCO more than offset by a decrease in the Equipment Group. Gross profit margins were lower compared to prior year, in large part due to sales mix, with a lower percentage of product support revenue to total revenue. Additionally, the prior year was a stronger comparator in the Equipment Group given market dynamics in play at that time. Operating income was down 8% compared to the stronger results last year, as the higher top-line revenue was offset by lower gross margins and slightly higher expenses. Revenue for the quarter increased 7% from the comparable period last year to $1.1 billion. Equipment Group revenue increased 7% compared to last year on higher new equipment sales and rental revenue offset by lower used equipment sales and product support activity . CIMCO revenue increased 9% versus last year, on higher package revenue and product support activity. Gross profit margin decreased 220 basis points ("bps") to 22.4% versus 24.6% for the first quarter of last year. The Equipment Group reported lower margins in all areas, while CIMCO margins increased overall on good project execution. Sales mix was unfavourable, with a lower proportion of product support revenues to total, dampening margins by 90 bps. Selling and administrative expenses for the quarter increased $1.5 million or 1% compared to the similar period last year. The acquired company added $4.0 million to expenses, including expenses related to acquisition accounting. Excluding the acquired company, selling and administrative expenses decreased $2.5 million or 2% from the first quarter of last year on strong focus on cost controls. Compensation costs decreased approximately $2.0 million, reflecting lower profit sharing accruals on the lower income, partially offset by regular salary increases. Sales related expenses, including such things as advertising, promotion, travel and training, increased $1.2 million year over year, reflecting the higher activity levels. Other expenses such as TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 3 Toromont Industries Ltd. — Q1 2025 Interim Report
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occupancy, information technology costs, professional and consulting fees, and depreciation on recent capital investments increased $4.4 million on continued investment for future growth and inflationary effects. Allowance for doubtful accounts expense decreased $3.8 million compared to the similar period last year, reflecting good collections and improvements on certain exposures. Mark-to-market adjustments on DSUs resulted in a $2.3 million decrease in expense, as a result of the lower share price. Overall, s elling and administrative expenses were 80 bps lower as a percentage of revenue (13.3% versus 14.1% last year). Operating income decreased $8.1 million or 8% in the quarter, as higher revenue was more than offset by lower gross margins and higher expenses. Operating income margin decreased 150 bps to 9.0%, reflecting lower gross margins, in part due to an unfavourable sales mix. Interest expense was largely unchanged at $7.4 million, with similar average borrowings outstanding and an unused credit facility. The new debentures were issued on March 28, 2025, thus it did not have an impact on interest expense in the quarter. Interest and investment income decreased $4.5 million or 29% in the quarter on lower average cash balances and lower interest rates. The effective income tax rate for the quarter was unchanged from the similar period last year at 27.2%. Net earnings for the quarter decreased $9.5 million or 11% to $74.4 million from the comparable period last year. Basic earnings per share ("EPS") decreased $0.10 or 10% to $0.92. Other comprehensive loss of $8.2 million in the quarter ( 2024 – comprehensive income of $27.4 million ) included an actuarial loss on post-employment benefit plans of $3.1 million ( 2024 – actuarial gain of $17.2 million). These losses/gains reflect actuarial changes used in the valuation, as well as changes in the fair value of pension plan assets . Other comprehensive income also included an unfavourable net change in the fair value of cash flow hedges of $5.1 million (2024 – favourable net change of $9.6 million). These changes reflect mark -to-market differences in the value of foreign exchange derivative contracts designated as cash flow hedges and are largely a function of the underlying USD/CAD exchange rates at period end compared to the contract date. BUSINESS SEGMENT OPERATING RESULTS The accounting policies of the segments are the same as those of the consolidated entity. Management evaluates overall business segment performance based on revenue growth, operating income relative to revenue and return on capital employed. Corporate expenses are allocated based on each segment’s revenue. Interest expense and interest and investment income are not allocated. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 4 Toromont Industries Ltd. — Q1 2025 Interim Report
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Equipment Group ($ thousands) 2025 2024 $ change % change Equipment sales and rentals New $ 410,585 $ 330,391 $ 80,194 24 % Used 50,410 63,822 (13,412) (21) % Rentals 106,390 95,854 10,536 11 % Total equipment sales and rentals 567,385 490,067 77,318 16 % Product support 423,563 435,303 (11,740) (3) % Power generation 2,352 2,775 (423) (15) % Total revenue $ 993,300 $ 928,145 $ 65,155 7 % Operating income $ 88,888 $ 98,756 $ (9,868) (10) % KEY RATIOS: Product support revenue as a % of total revenue 42.6% 46.9% Operating income margin 8.9% 10.6% Group total revenue as a % of consolidated revenue 91.2% 91.3% The Equipment Group continued to execute well against order backlog, however growth was constrained by the slowing economic environment affecting end customer demand . Revenue increased on solid equipment deliveries against order backlog in mining and power systems, which includes the newly acquired AVL operations (from January 31, 2025). Rental revenue improved in the quarter, while used equipment sales declined. Product support revenue decrease on lower parts activity and was partially offset by higher service activity. Operating income declined versus the prior year, as expected, given a strong comparator which reflected market dynamics in play at that time, along with an unfavourable sales mix, lower gross margins and higher expenses. Total equipment revenue (new and used) increased $66.8 million or 17% across most market segments and regions compared to the first quarter of last year , reflecting inflow and delivery of equipment against order backlog. New equipment sales increased 24% in the period, with good increases in mining and power systems, which includes the acquired operations. Used equipment sales decreased 21%, primarily in the construction market, with lower rental fleet dispositions on fleet management decisions, and lower sales of used equipment from trades and purchases, reflecting supply and demand dynamics. The change in equipment revenue by market segment was as follows: construction +4%, mining +50%, power systems +32% and material handling +5%. Rental revenue increased $10.5 million or 11% versus the first quarter of last year . While market conditions remain soft, revenues increased compared to the prior year reflecting a larger fleet and improved utilization in some areas. Revenue changes in each market were as follows: Light equipment rentals +8%, heavy equipment rentals +16%, power systems -20% and material handling +12% . As at March 31, 2025 , the RPO fleet (rent with a purchase option) was $101.0 million versus $70.1 million at this time last year, and associated rental revenue was up 51% compared to last year. Product support revenue decreased $11.7 million or 3% compared to the first quarter of last year with a decrease in parts (5% lower), partially offset by an increase in service (up 4%). Activity was lower across most markets a nd regions reflecting end user demand and activity levels. Revenue change by market was as follows: construction -3%; mining -3%; power systems unchanged; and material handling -6%. Gross profit margin decreased 260 bps to 21.8% from 24.4% in the first quarter of last year . Sales mix was unfavourable with a higher proportion of equipment revenue to total revenue, dampening margin 110 bps. Equipment margins were 60 bps lower on cautious market conditions, Rental margins decreased 30 bps on TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 5 Toromont Industries Ltd. — Q1 2025 Interim Report
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higher recent fleet acquisition costs, in part due to a weaker Canadian dollar, and higher maintenance and repair costs. Product support margins were down 60 bps year over year. Selling and administrative expenses were largely unchanged compared to the similar period last year. Selling and administrative expenses at the acquired company contributed $4.0 million to expenses, including expenses related to purchase price accounting. Excluding the acquired company, c ompensation costs were $4.6 million lower year-over-year reflecting lower DSU MTM expense, lower profit sharing accruals on the lower income, partially offset by regular salary increases. Sales-related costs increased $1.2 million, reflective of the 7% increase in revenue. Other expenses such as occupancy costs, information technology and professional and consulting fees increased $3.2 million. Allowance for doubtful accounts decreased $3.6 million, reflecting good collections and improvement in certain exposures. As a percentage of revenue, selling and administrative expenses were 90 bps lower at 12.9% in the current period versus 13.8% in the similar period last year reflecting good cost control management. Operating income decreased $9.9 million or 10% reflecting the higher revenue, more than offset by lower gross margins. As a percentage of revenue, operating income was 170 bps lower at 8.9% versus 10.6% in the first quarter of last year. Bookings and Backlog ($ millions) 2025 2024 $ change % change Bookings – three months ended March 31 $ 501.9 $ 521.6 $ (19.7) (4) % Backlog – as at March 31 $ 982.0 $ 1,084.7 $ (102.7) (9) % New bookings decreased $19.7 million or 4% in the first quarter of 2025 , compared to the first quarter of last year. Mining orders were 41% lower than last year on a strong comparable which included several large customer orders. Construction and material handling bookings increased 1% and 39% respectively. Power systems orders increased 48%, on good market activity along with the acquired business. Backlog of $982.0 million at March 31, 2025 , included approximately $ 230.0 million acquired with AVL, for delivery over the next two years. Excluding this, backlog was 32% lower compared to the same time last year, reflecting good deliveries against customer orders over the last twelve months, along with good new order intake over the same period. As at March 31, 2025 , the composition of backlog by market was as follows: construction 28%; mining 14%; power systems 54%; and material handling 4%. Approximately 80% of the backlog is expected to be delivered over the next twelve months, however this is subject to timing of vendor supply and customer delivery schedules. Bookings and backlog can vary significantly from period to period on large project activities (particularly in mining and power systems), the timing of orders and deliveries with customers (which are in turn reflective of economic factors and general activity levels), and the availability of equipment from either inventory or suppliers. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 6 Toromont Industries Ltd. — Q1 2025 Interim Report
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CIMCO ($ thousands) 2025 2024 $ change % change Package sales $ 42,126 $ 36,685 $ 5,441 15 % Product support 54,196 51,519 2,677 5 % Total revenue $ 96,322 $ 88,204 $ 8,118 9 % Operating income $ 9,597 $ 7,829 $ 1,768 23 % KEY RATIOS: Product support revenue as a % of total revenue 56.3% 58.4% Operating income margin 10.0% 8.9% Group total revenue as a % of consolidated revenue 8.8% 8.7% CIMCO had a solid start to the year driven by good execution in both Canada and the US, against a strong order backlog, resulting in good package revenue growth. Product support activity continued to demonstrate growth in the US and Canada, supported by the larger technician workforce. Operating income increased on the higher revenue and good execution, partially offset by unfavourable sales mix (lower product support revenue to total revenue) and higher expenses to support activity and growth. Package sales increased $5.4 million or 15% versus the first quarter of last year , with an increase in the industrial market, slightly offset by a decrease in the recreational market. Industrial revenue was up 24%, largely driven by higher activity and improved execution and delivery in the US (+121%) and relatively unchanged activity in Canada. Recreational revenue decreased 6%, as higher revenue in Canada (+58%) was more than offset by lower activity in the US (-86%). Package revenue reflects the progress of construction a p p l y i n g t h e p e r c e n t a g e - o f - c o m p l e t i o n m e t h o d o f a c c o u n t i n g . T h i s i n t r o d u c e s a d e g r e e o f v a r i a b i l i t y a s t h e timing of construction schedules are largely under the control of third parties (contractors and end-customers). Product support revenue increased $2.7 million or 5% versus the first quarter of last year on higher activity levels in both Canada (up 2%) and in the US (up 15%). Activity levels continued to improve on good customer demand and the increased technician base. Gross profit margin increased 100 basis points versus the first quarter of last year to 27.8%. Package margins increased 160 bps on good execution and the nature of projects in process. Produ ct support margins decreased 40 bps on the profile of activity. An un favourable sales mix, with a lower proportion of product support to total revenue, dampened margins by 20 bps. Selling and administrative expenses increased $1.3 million or 8% versus the first quarter of last year . Compensation costs increased $0.3 million reflecting staff levels, annual salary increases and higher profit sharing accruals on the higher earnings. Other expenditures such as travel, training and occupancy expenses increased $1.0 million to support activity and staffing levels. As a percentage of revenue, selling and administrative expenses improved to 17.8% in the first quarter of 2025 versus 17.9% in the first quarter of last year. Operating income increased by $1.8 million or 23% in the first quarter of 2025 , reflecting improved gross margins and higher revenue. Operating income as a percentage of revenue increased 110 bps to 10.0% compared to the first quarter of last year. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 7 Toromont Industries Ltd. — Q1 2025 Interim Report
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Bookings and Backlog ($ millions) 2025 2024 $ change % change Bookings – three months ended March 31 $ 47.7 $ 103.1 $ (55.4) (54) % Backlog – as at March 31 $ 347.7 $ 323.2 $ 24.5 8 % Bookings decreased $55.4 million or 54% to $47.7 million in the first quarter of 2025 , against a strong comparator in the prior year. Recreational bookings decreased 32% and industrial bookings were down 70%, with lower orders in both Canada and the US. Generally, activity is continuing, with good strategic capital investment levels, however the current economic uncertainty has delayed customer buying decisions. Order bookings can be lumpy reflective of timing of end-user schedules and timing of buying decisions. Backlog of $347.7 million increased $24.5 million or 8% compared to 2024, with higher backlog in the recreational market, offset by lower activity in the industrial market. Recreational backlog was up 45%, reflecting a strong increase in both Canada (+36%) and in the US (+53%) . Industrial backlog decreased 16%, with a decrease in Canada (-31%, against a strong comparator), partially offset by an increase in the US (+55%). Approximately 75% of the backlog is expected to be realized as revenue over the next twelve months, however this is subject to construction schedules. CONSOLIDATED FINANCIAL CONDITION The Company maintained a strong financial position. At March 31, 2025 , the ratio of net debt to total capitalization(1) was -1% (net cash position), compared to -9% at December 31, 2024, and -14% at March 31, 2024. Non-cash Working Capital The Company's investment in non-cash working capital was $1.1 billion at March 31, 2025 . The major components, along with the changes from prior periods, are identified in the following table. March 31 March 31 Change December 31 Change ($ thousands) 2025 2024 $ % 2024 $ % Accounts receivable $ 617,869 $ 536,739 $ 81,130 15 % $ 628,671 $ (10,802) (2) % Inventories 1,392,626 1,257,356 135,270 11 % 1,321,567 71,059 5 % Other current assets 19,410 18,658 752 4 % 22,074 (2,664) (12) % Accounts payable and accrued liabilities (560,526) (656,423) 95,897 (15) % (667,907) 107,381 (16) % Provisions (30,271) (29,823) (448) 2 % (30,675) 404 (1) % Income tax recoverable 28,280 20,262 8,018 40 % 8,267 20,013 nm Derivative financial instruments 6,766 2,880 3,886 nm 19,352 (12,586) (65) % Dividends payable (42,253) (39,543) (2,710) 7 % (39,127) (3,126) 8 % Deferred revenue and contract liabilities (352,689) (337,881) (14,808) 4 % (331,946) (20,743) 6 % Total non-cash working capital $ 1,079,212 $ 772,225 $ 306,987 40 % $ 930,276 $ 148,936 16 % Accounts receivable increased 15% from March 31, 2024, in part reflecting the 7% increase in revenue in the quarter, good collection activity, and approximately $44.0 million receivables at the acquired AVL operation . Days sales outstanding ("DSOs") increased 1 day to 42 days overall, mainly reflecting an increase in DSO at CIMCO, up 10 days, while the Equipment Group remained unchanged. Collection activity and credit metrics are being closely monitored, especially given the current economic environment. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 8 Toromont Industries Ltd. — Q1 2025 Interim Report
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In comparison to December 31, 2024, accounts receivable decreased 2%, reflecting 17% lower trailing revenue and slower collections, partially offset by accounts receivable added as a result of the acquisition. DSO was 40 days at December 31, 2024. Inventories at March 31, 2025 increased 11% compared to March 31, 2024, mainly representing an increase in the Equipment Group, while CIMCO remained relatively unchanged: • Equipment Group inventories were up $139.3 million or 12%, with increased equipment (up $38.4 million or 5%), w o r k - i n - p r o g r e s s ( up $45.0 million or 36%), and parts ( up $56.0 million or 17%). Inventory levels of equipment and parts increased in light of activity levels, higher availability of new equipment due to improved supply chain and purchasing in light of economic uncertainty and trade tensions. Price increases and foreign exchange rates on US sourced supplies have also served to increase inventory. Work-in-process levels reflect higher activity levels. • CIMCO inventories were relatively unchanged, up $0.1 million , as higher w o r k - i n - p r o c e s s l e v e l s increased $0.5 million (up 1%), reflecting timing of project construction and product support schedules, were largely offset by lower parts inventory levels down $0.4 million reflecting timing of inventory utilization on jobs. Inventories at March 31, 2025 were 5% higher compared to December 31, 2024, with increases in both Groups: • Equipment Group inventories were up $65.8 million or 5% with increases in equipment (up $34.5 million or 5%), work-in-process ( up $28.8 million or 21%), and parts inventories ( up $2.5 million or 1%). Inventory levels are typically lowest at the end of the year due to seasonality, with inventories building during the year in advance of the busier selling period, and in part reflecting purchasing in light of economic uncertainty and trade tensions. • CIMCO inventories were up $9.5 million or 23%, predominantly driven by higher work-in-process levels (up $9.9 million or 27%), slightly offset by lower parts inventories ( down $0.4 million or 8%) reflecting similar reasons as the quarter. Other current assets are comprised of prepaid expenses and vendor deposits. These vary over time based on timing of ordering, receipt of invoice, vendor terms and payment. Accounts payable and accrued liabilities at March 31, 2025 , were 15% lower than at March 31, 2024 , largely reflecting timing of purchase and payment for inventory and other suppliers. In comparison to December 31, 2024, accounts payable and accrued liabilities decreased 16%, mainly reflecting the timing of purchase and payment for inventory and other suppliers, as well as the payment of annual performance bonuses, partially offset by balances at the acquired company. Income tax recoverable reflects the difference between tax installments and current income tax expense. Derivative financial instruments represent the fair value of foreign exchange contracts. Fluctuations in the value of the Canadian dollar have led to a cumulative net gain of $6.8 million as at March 31, 2025 . This is not expected to affect net earnings as the unrealized gains will offset future losses on the related hedged items, either current accounts payable or future transactions. Dividends payable increased compared to March 31 and December 31, 2024, reflecting the higher dividend rate. The dividend rate was increased 8.3% effective with the first quarter of 2025, which represented the 36th year of consecutive dividend increases. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 9 Toromont Industries Ltd. — Q1 2025 Interim Report
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Deferred revenue and contract liabilities represent billings to customers in excess of revenue recognized. • In the Equipment Group, these balances arise due to: progress billings from the sale of power and energy systems; long-term product support maintenance contracts; and, customer deposits for equipment to be delivered in the future. As at March 31, 2025 , these were down 4% versus March 31, 2024 , on lower customer deposits reflecting delivery of equipment over the last 12 months. Compared to December 31, 2024, deferred revenue was down 1% reflecting lower customer deposits on order delivery. Deferred revenue balance includes approximately $47.0 million at the acquired company. • At CIMCO, these balances arise on progress billings from the sale of refrigeration packages and vary depending on timing of billings compared to customer’s construction schedules. As at March 31, 2025, these were up 43% versus March 31, 2024, and up 34% versus December 31, 2024, reflecting in part the higher order backlog. Legal and Other Contingencies Due to the size, complexity and nature of the Company's operations, various legal matters are pending. Exposure to these claims is mitigated through levels of insurance coverage considered appropriate by management and by active management of these matters. In the opinion of management, none of these matters will have a material effect on the Company's financial position or results of operations. Normal Course Issuer Bid ("NCIB") The Company's NCIB program was renewed in September 2024. The current issuer bid allows the Company to purchase up to 8.2 million common shares during the 12-month period ending September 20, 2025. All shares purchased under the bid will be cancelled. The Company purchased and cancelled 204,900 common shares for $25.2 million (average cost of $123.22 per share, including transaction costs) during the three months ended March 31, 2025. The Company maintains an Automatic Share Purchase Plan ("ASPP") with a broker to enable the purchase of common shares under the NCIB during regular trading blackout periods. The volume of the purchases are determined by the broker based on share price and maximum volume parameters established by the Company prior to the commencement of each blackout period. The Company purchased and cancelled 195,700 common shares for $25.0 million (average cost of $127.70 per share, including transaction costs) during the three months ended March 31, 2024. As at March 31, 2025 and 2024, there were no obligations for the repurchase of shares under the ASPP. Long-term Incentive Plan ("LTIP") A total of 30,299 restricted share units ("RSUs") and 81,657 performance share units ("PSUs") were outstanding under the LTIP as at March 31 , 2025, including reinvested dividends. During the three months ended March 31, 2025, the Company settled 28,812 units in exchange for 11,280 common shares issued from treasury, 13,283 equity-settled DSUs, and 4,249 units were settled at their cash value as payment for tax withholding related to the settlement of the awards. For the three months ended March 31, 2025, LTIP expense of $1.4 million (2024 – $1.1 million) was included in selling and administrative expenses with a credit to contributed surplus. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 10 Toromont Industries Ltd. — Q1 2025 Interim Report
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Outstanding Share Data As at the date of this MD&A, the Company had 81,262,767 common shares and 1,600,517 share options outstanding. Dividends The Company declared and paid the following dividends to common shareholders during the last eight quarters. Record Date Payment Date Dividend Amount per Share Dividends Paid in Total ($ millions) Jun. 9, 2023 Jul. 5, 2023 $0.43 $35.6 Sep. 8, 2023 Oct. 4, 2023 $0.43 $35.4 Dec. 8, 2023 Jan. 4, 2024 $0.43 $35.4 Mar. 8, 2024 Apr. 4, 2024 $0.48 $39.5 Jun. 7, 2024 Jul. 5, 2024 $0.48 $39.3 Sep. 6, 2024 Oct. 2, 2024 $0.48 $39.3 Dec. 6, 2024 Jan. 6, 2025 $0.48 $39.1 Mar. 7, 2025 Apr. 4, 2025 $0.52 $42.3 The Board of Directors increased the quarterly dividend by 8.3% or 4 cents per share, to 52 cents per common share on February 11, 2025. The next dividend is payable on July 3, 2025 to shareholders on record on June 6, 2025. LIQUIDITY AND CAPITAL RESOURCES Sources of Liquidity Toromont's liquidity requirements can be met through a variety of sources, including cash on hand, cash generated from operations, long and short-term borrowings and the issuance of common shares. Borrowings are obtained through a variety of senior debentures, notes payable and committed credit facilities. Toromont's debt portfolio is unsecured, unsubordinated and ranks pari passu. Effective March 21, 2025, the Company amended its existing $500.0 million committed revolving credit facility and extended the term of the agreement to March 2030, with a syndicate of financial institutions. Debt under this facility is unsecured and ranks pari passu with debt outstanding under Toromont's existing debentures. Interest is based on a floating rate, primarily bankers' acceptances and prime, plus applicable margins and fees based on the terms of the credit facility. No amounts have been drawn on the revolving credit facility as at March 31, 2025 , December 31, 2024 and March 31, 2024. Standby letters of credit issued utilized $43.7 million of the facility as at March 31, 2025 (December 31, 2024 – $40.8 million; March 31, 2024 – $39.1 million). TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 11 Toromont Industries Ltd. — Q1 2025 Interim Report
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On March 28, 2025, the Company issued senior unsecured debentures in an aggregate principal amount of $300.0 million (the "Debentures"). The Debentures mature in 2030 and bear interest at a rate of 3.76% per annum, payable semi-annually. The Debentures are unsecured, unsubordinated and rank pari passu with other unsecured, unsubordinated debt. Toromont intends to use the net proceeds to pay the principal owing on the outstanding 3.71% senior debentures due September 30, 2025, and for general corporate purposes. The Company expects that continued cash flows from operations, together with cash and cash equivalents on hand and currently available credit facilities will be more than sufficient to fund requirements for investments in working capital and capital assets. The Company also has a certain degree of flexibility in its operating and investing plans to mitigate fluctuations. Principal Components of Cash Flow Cash from operating, investing and financing activities, as reflected in the Interim Condensed Consolidated Statements of Cash Flows, are summarized in the following table: Three months ended March 31 ($ thousands) 2025 2024 Cash and cash equivalents, beginning of period $ 890,815 $ 1,040,757 Cash, provided by (used in): Operating activities Operations 132,555 127,718 Change in non-cash working capital and other (169,606) (45,486) Net rental fleet additions (46,030) (51,439) (83,081) 30,793 Investing activities (61,189) (32,735) Financing activities 230,940 (55,765) Effect of foreign exchange on cash and cash equivalents balances (24) 305 Increase (decrease) in cash and cash equivalents during the period $ 86,646 $ (57,402) Cash and cash equivalents, end of period $ 977,461 $ 983,355 Cash Flows from Operating Activities Operating activities utilized cash in the first quarter of 2025 and provided cash in the comparable period last year. Cash generated from operations increased 4% from the comparable period last year reflecting the lower net earnings more than offset by higher non-cash items, predominantly depreciation and amortization. Non-cash working capital and other used cash in the first quarter of 2025 , reflecting higher working capital levels building in advance of the order backlog and in light of uncertain economic conditions and lower accounts payable (on the timing of payments to suppliers). Non-cash working capital and other also used cash in similar period last year on similar reasons. Non-cash working capital and other used more cash in the first quarter of 2025 compared to the similar period last year, in light of the relative opening working capital positions for each period. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 12 Toromont Industries Ltd. — Q1 2025 Interim Report
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Cash used for net rental fleet additions (purchases less proceeds of dispositions) decreased by $5.4 million in the first quarter of 2025 compared to the similar period last year. The Company continued to invest in both the h e a v y a n d l i g h t e q u i p m e n t r e n t a l f l e e t s a c r o s s E a s t e r n C a n a d a r e f l e c t i v e o f l o n g - t e r m g r o w t h s t r a t e g i e s , although at lower rates than in the comparative period. Dispositions were lower year over year reflecting demand and fleet management decisions. The components and changes in non-cash working capital are discussed in more detail in this MD&A under the heading "Consolidated Financial Condition". Cash Flows from Investing Activities During the quarter, the Company used cash of $43.5 million for the acquisition of AVL, net of cash acquired. See note 3 to the interim condensed consolidated financial statements for further information on this transaction. Investments in property, plant and equipment totalled $17.3 million in the first quarter of 2025 ( 2024 – $32.9 million) and related largely to: • $11.5 million additions for l and, buildings and construction in process for new and upgraded facilities across the business (2024 – $15.4 million); • $5.3 million for normal replacement of service and delivery vehicles (2024 – $14.6 million); • $0.4 million for upgrades and enhancements to information technology infrastructure and office furniture (2024 – $0.5 million); and • $1.9 million for machinery and equipment replacements and upgrades (2024 – $2.5 million). Cash Flows from Financing Activities During the first quarter of 2025, financing activities generated $230.9 million ( 2024 – used $55.8 million) in cash, major uses and sources of cash during the quarter included: • Dividends paid to common shareholders of $39.1 million or $0.52 per share ( 2024 – $35.4 million or $0.43 per share); • Net cash received on exercise of share options and settlement of RSUs and PSUs of $1.0 million (2024 – $7.1 million); • Issue of senior debentures generated $300.0 million (2024 – $nil); • Debt issuance costs used $3.0 million (2024 – $nil); • Purchase of shares under the NCIB program used $25.2 million (2024 – $25.0 million); and, • Lease liability payments of $2.7 million (2024 – $2.5 million). OUTLOOK With a long-term focus on growth and returns, we remain dedicated to our operating and financial disciplines to ensure our costs are well managed, while we invest in capacity and capabilities to provide exceptional service to our customers. We continue to monitor regional, national and global economic factors, in particular, inflationary pressures from price and wage increases, interest rate changes and general economic health of the industries we serve. The recent trade tensions have created additional economic turbulence for every company engaged in cross border trade. Our team is engaged, monitoring and developing an appropriate action plan to navigate the potential TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 13 Toromont Industries Ltd. — Q1 2025 Interim Report
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impacts over the short and longer term when details become available. Foreign exchange rate volatility, and a weaker Canadian dollar are also being monitored given the majority of our supply of equipment and parts is sourced in US dollars. Hedging and pricing policies should limit bottom line exposure to changing exchange rates, however the impact on the economy as whole could be a factor. The global supply chain has improved gradually. The Equipment Group's parts and service business provides stability supported by a large and diversified installed base of equipment. The long-term outlook for infrastructure projects and other construction activity is positive across most territories although tied somewhat to the general economic climate. Mine investment and expansion will remain dependent on global economic and financial conditions. We have had several years of significant deliveries to the mining industry which has impacted sales mix, however should support product support activity in the future as the machines are utilized. Power systems, particularly prime and stand-by power generation, continues to be in demand. Our investment in an enclosure manufacturer should support our position and future growth in this market. Investment continues in broadening product lines and service offerings, expanding and enhancing the branch network, optimizing rental fleets, and using technologies to create efficiency and effectiveness across the organization. Integration and alignment of operating processes and systems, best practices and culture, continues across our territory. Product support technologies, such as remote diagnostics, telematics and digital information models support and expand our strategic platform. CIMCO's installed base supports current and future operations and growth trends. CIMCO has a wide product offering using natural refrigerants including innovative CO 2 solutions, which remains a differentiator in the markets they serve. In industrial markets, CIMCO's proven track record and strong geographical coverage provides growth opportunities. Current backlog is supportive of future activity. The diversity of the markets served, expanding product offering and services, strong financial position and disciplined operating culture position the Company well for continued positive results in the long term. QUARTERLY RESULTS The following table summarizes quarterly consolidated financial data for the eight most recently completed quarters. This quarterly information is unaudited and has been prepared on the same basis as the 2024 annual audited consolidated financial statements. Data reflects results including discontinued operations, unless otherwise noted. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 14 Toromont Industries Ltd. — Q1 2025 Interim Report
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($ thousands, except per share amounts) Q1 2025 Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 REVENUE Equipment Group $ 993,300 $ 1,185,953 $ 1,210,821 $ 1,235,649 $ 928,145 $ 1,128,907 $ 1,065,615 $ 1,070,194 CIMCO 96,322 121,000 127,171 124,220 88,204 98,030 108,430 104,762 Total revenue $ 1,089,622 $ 1,306,953 $ 1,337,992 $ 1,359,869 $ 1,016,349 $ 1,226,937 $ 1,174,045 $ 1,174,956 NET EARNINGS $ 74,436 $ 156,296 $ 130,951 $ 135,350 $ 83,919 $ 154,052 $ 145,619 $ 139,037 PER SHARE INFORMATION: Basic earnings per share $ 0.92 $ 1.91 $ 1.60 $ 1.65 $ 1.02 $ 1.87 $ 1.77 $ 1.69 Diluted earnings per share $ 0.91 $ 1.90 $ 1.59 $ 1.64 $ 1.01 $ 1.86 $ 1.76 $ 1.68 Dividends paid per share $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 0.43 $ 0.43 $ 0.43 $ 0.43 Weighted average common shares outstanding – basic (in thousands) 81,312 81,721 81,931 82,090 82,309 82,315 82,282 82,294 Interim period revenue and earnings historically reflect variability from quarter to quarter due to seasonality. This trend has been impacted in recent years by the pandemic and resulting impact on the economy, including global supply chains. Such factors or others may result in variations to historically experienced trends. The Equipment Group has historically had a distinct seasonal trend in activity levels. Lower revenue is recorded during the first quarter due to winter shutdowns in the construction industry. The fourth quarter has typically been the strongest due in part to the timing of customers' capital investment decisions, delivery of equipment from suppliers for customer-specific orders and conversions of equipment on rent with a purchase option. This pattern can be impacted by the timing of significant sales to mining and other customers, resulting from the timing of mine site development and access, and construction project schedules. This trend can also be impacted during periods of equipment supply constraints from suppliers. CIMCO has also had a distinct seasonal trend in results historically, as the timing of construction activity impacts revenue recognition under percentage-of-completion accounting. Revenue is typically lower during the first quarter as winter weather slows down construction schedules. Revenue increases in subsequent quarters as construction schedules ramp up. This trend can be impacted by governmental funding initiatives, supply constraints and the customer's timing of significant industrial projects. Sequential comparisons are also impacted by CIMCO's relatively high fixed cost structure. Historically, inventories have increased through the year to meet the expected demand for higher deliveries in the third and fourth quarter. This trend can be impacted by equipment and parts availability. These seasonal s a l e s t r e n d s a l s o t y p i c a l l y l e a d t o a c c o u n t s r e c e i v a b l e t o b e a t t h e i r h i g h e s t l e v e l a t y e a r - e n d . In 2023 and 2024, we saw gradual improvements to supply chain availa bility across most of our product offerings, although constraints in some areas still exist. Net earnings have generally followed the trend in revenue. Cost reduction and containment strategies continue to be a focus, however, have a delayed effect on net earnings. Local and global economic factors, and supply chain issues have affected and may continue to impact these trends. There can be no certainty that this historical seasonal pattern will recur in the future. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 15 Toromont Industries Ltd. — Q1 2025 Interim Report
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RISKS AND RISK MANAGEMENT The significant risks and uncertainties affecting the Company and its business are discussed in the Company's MD&A for the year ended December 31, 2024 under "Risks and Risk Management". MATERIAL ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTING ESTIMATES Accounting Policies The material accounting policies used in the preparation of the accompanying unaudited interim condensed consolidated financial statements are consistent with those used in the Company's 2024 audited annual consolidated financial statements, and described in note 2 therein, except as noted below. Several amendments apply for the first time in 2025, but do not have an impact on the interim condensed consolidated financial statements of the Company. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. Estimates The preparation of financial statements in conformity with IFRS requires estimates and assumptions that affect the results of operations and financial position. By their nature, these judgments are subject to an inherent degree of uncertainty and are based upon historical experience, trends in the industry and information available from outside sources. Management reviews its estimates on an ongoing basis. Different accounting policies, or changes to estimates or assumptions could potentially have a material impact, positive or negative, on Toromont's financial position and results of operations. There have been no material changes to the critical accounting estimates as described in note 3 to the Company's 2024 audited annual consolidated financial statements, contained in the Company's 2024 Annual Report. CONTROLS AND PROCEDURES Disclosure Controls and Procedures The President and Chief Executive Officer ("CEO") and Executive Vice President and Chief Financial Officer ("CFO") are responsible for establishing and maintaining disclosure controls and procedures, as defined in National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings , and have designed such disclosure controls and procedures, or have caused it to be designed under their supervision, to provide reasonable assurance that material information with respect to Toromont is made known to them by others and is recorded, processed, summarized and reported within the time periods specified in securities legislation. Internal Control over Financial Reporting The CEO and CFO, together with management, are responsible for establishing and maintaining adequate internal control over financial reporting, as defined by National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings, and have designed such internal control over financial reporting, or TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 16 Toromont Industries Ltd. — Q1 2025 Interim Report
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caused it to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS. In accordance with the provisions of National Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings, our Chief Executive Officer and Chief Financial Officer have limited the scope of their design of our disclosure controls and procedures and internal control over financial reporting to exclude the controls, policies, and procedures of AVL, which we acquired on January 31, 2025. The acquired AVL business contributed a relatively insignificant amount of revenue and net income in the three months ended March 31, 2025. Additionally, as at March 31, 2025, the total assets and total liabilities of the acquired AVL operations each represented approximately 9% of consolidated total assets and total liabilities, respectively, The design of the disclosure controls and procedures and internal control over financial reporting of the acquired AVL operations will be completed for the fourth quarter of 2025. There have been no changes in the design of the Company's internal control over financial reporting during the three months ended March 31, 2025 , that would materially affect, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Also, a projection of the evaluation of the effectiveness of internal control over financial reporting to future periods is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to the financial statement preparation and presentation. Internal controls over financial reporting may not prevent all errors and fraud. A control system, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met. ADDITIONAL GAAP MEASURES IFRS mandates certain minimum line items for financial statements and also requires presentation of additional line items, headings and subtotals when such presentation is relevant to an understanding of the Company's financial position or performance. IFRS also requires the notes to the financial statements to provide information that is not presented elsewhere in the financial statements, but is relevant to understanding them. Such measures outside of the minimum mandated line items are considered additional GAAP measures. The Company's interim condensed consolidated financial statements and notes thereto include certain additional GAAP measures where management considers such information to be useful to the understanding of the Company's results. Gross Profit Gross Profit is defined as total revenue less cost of goods sold. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 17 Toromont Industries Ltd. — Q1 2025 Interim Report
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Operating Income Operating income is defined as net earnings from operations before interest expense, interest and investment income and income taxes and is used by management to assess and evaluate the financial performance of its operating segments. Financing and related interest charges cannot be attributed to business segments on a meaningful basis that is comparable to other companies. Business segments do not correspond to income tax jurisdictions and it is believed that the allocation of income taxes distorts the historical comparability of the performance of the business segments. Three months ended March 31 ($ thousands) 2025 2024 Net earnings $ 74,436 $ 83,919 plus: Interest expense 7,446 6,994 less: Interest and investment income (11,179) (15,687) plus: Income taxes 27,782 31,359 Operating income $ 98,485 $ 106,585 Total revenue $ 1,089,622 $ 1,016,349 Operating income margin 9.0% 10.5% Net Debt to Total Capitalization/Equity Net debt to total capitalization/equity are calculated as net debt divided by total capitalization and shareholders' equity, respectively, as defined below, and are used by management as measures of the Company’s financial leverage. Net debt is calculated as long-term debt plus current portion of long-term debt less cash and cash equivalents. Total capitalization is calculated as shareholders' equity plus net debt. The calculations are as follows: March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Long-term debt $ 795,683 $ 498,518 $ 647,964 Current portion of long-term debt 149,941 149,910 — less: Cash and cash equivalents 977,461 890,815 983,355 Net debt (31,837) (392,297) (335,391) Shareholders' equity 2,972,561 2,955,393 2,754,769 Total capitalization $ 2,940,724 2,563,096 2,419,378 Net debt to total capitalization (1)% (15)% (14)% Net debt to equity (0.01):1 (0.08):1 (0.12):1 NON-GAAP MEASURES Management believes that providing certain non-GAAP measures provides users of the Company's unaudited interim condensed consolidated financial statements with important information regarding the operational performance and related trends of the Company's business. By considering these measures in combination TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 18 Toromont Industries Ltd. — Q1 2025 Interim Report
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with the comparable IFRS measures set out below, management believes that users are provided a better overall understanding of the Company's business and its financial performance during the relevant period than if they simply considered the IFRS measures alone. The non-GAAP measures used by management do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Accordingly, these measures should not be considered as a substitute or alternative for net income or cash flow, in each case as determined in accordance with IFRS. Working Capital Working capital is defined as total current assets less total current liabilities. Management views working capital as a measure for assessing overall liquidity. March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Total current assets $ 3,043,402 $ 2,890,746 $ 2,821,696 less: Total current liabilities 1,136,670 1,219,565 1,066,116 Working capital $ 1,906,732 $ 1,671,181 $ 1,755,580 Non-Cash Working Capital Non-cash working capital is defined as total current assets, excluding cash and cash equivalents, less total current liabilities, excluding current portion of long-term debt, if applicable. March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Total current assets $ 3,043,402 $ 2,890,746 $ 2,821,696 less: Cash and cash equivalents 977,461 890,815 983,355 2,065,941 1,999,931 1,838,341 Total current liabilities 1,136,670 1,219,565 1,066,116 less: Current portion of long-term debt 149,941 149,910 — 986,729 1,069,655 1,066,116 Non-cash working capital $ 1,079,212 $ 930,276 $ 772,225 Market Capitalization & Total Enterprise Value Market capitalization represents the total market value of the Company's equity. It is calculated by multiplying the closing share price of the Company's common shares by the total number of common shares outstanding. Total enterprise value represents the total value of the Company and is often used as a more comprehensive alternative to market capitalization. It is calculated by adding debt/net debt (defined above) to market capitalization. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 19 Toromont Industries Ltd. — Q1 2025 Interim Report
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The calculations are as follows: March 31 December 31 March 31 ($ thousands, except for shares and share price) 2025 2024 2024 Outstanding common shares 81,262,767 81,300,574 82,213,286 times: Ending share price $ 112.63 $ 113.64 $ 130.35 Market capitalization $ 9,152,625 $ 9,238,997 $ 10,716,502 Long-term debt $ 795,683 $ 498,518 $ 647,964 Current portion of long-term debt 149,941 149,910 — less: Cash and cash equivalents 977,461 890,815 983,355 Net debt $ (31,837) $ (242,387) $ (335,391) Total enterprise value $ 9,120,788 $ 8,996,610 $ 10,381,111 KEY PERFORMANCE INDICATORS ("KPIs") Management uses key performance indicators to enable consistent measurement of performance across the organization. These KPIs are non-GAAP financial measures, do not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. Gross Profit Margin This measure is defined as gross profit (defined above) divided by total revenue. Operating Income Margin This measure is defined as operating income (defined above) divided by total revenue. Order Bookings and Backlog Order bookings represent the retail value of firm equipment or project orders received during a period. Backlog is defined as the retail value of equipment units ordered by customers with future delivery, and the remaining retail value of package/project orders remaining to be recognized in revenue under the percentage of completion method. Management uses order backlog as a measure of projecting future equipment and project deliveries. There are no directly comparable IFRS measures for order bookings or backlog. TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 20 Toromont Industries Ltd. — Q1 2025 Interim Report
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Return on Capital Employed ("ROCE") ROCE is utilized to assess both current operating performance and prospective investments. The adjusted earnings numerator used for the calculation is income before income taxes, interest expense and interest income (excluding interest on rental conversions). The denominator in the calculation is the monthly average capital employed, which is defined as net debt plus shareholders' equity, also referred to as total capitalization, adjusted for discontinued operations. Trailing twelve months ended March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Net earnings $ 497,033 $ 506,516 $ 522,627 plus: Interest expense 29,107 28,655 28,188 less: Interest and investment income (49,129) (53,637) (51,383) plus: Interest income – rental conversions 4,528 3,635 3,684 plus: Income taxes 185,061 188,638 191,111 Adjusted net earnings $ 666,600 $ 673,807 $ 694,227 Average capital employed $ 2,763,165 $ 2,621,627 $ 2,396,373 Return on capital employed 24.1% 25.7% 29.0% Return on Equity ("ROE") ROE is monitored to assess profitability and is calculated by dividing net earnings by opening shareholders' equity (adjusted for shares issued and shares repurchased and cancelled during the period), both calculated on a trailing twelve month period. Trailing twelve months ended March 31 December 31 March 31 ($ thousands) 2025 2024 2024 Net earnings $ 497,033 $ 506,516 $ 522,627 Opening shareholder's equity (net of adjustments) $ 2,689,760 $ 2,636,834 $ 2,374,586 Return on equity 18.5% 19.2% 22.0% TOROMONT INDUSTRIES LTD. Management Discussion and Analysis – 2025 Q1 21 Toromont Industries Ltd. — Q1 2025 Interim Report
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March 31 December 31 March 31 ($ thousands) Note 2025 2024 2024 Assets Current assets Cash and cash equivalents $ 977,461 $ 890,815 $ 983,355 Accounts receivable 617,869 628,671 536,739 Inventories 1,392,626 1,321,567 1,257,356 Income taxes recoverable 29,270 8,267 22,708 Derivative financial instruments 7 6,766 19,352 2,880 Other current assets 19,410 22,074 18,658 Total current assets 3,043,402 2,890,746 2,821,696 Property, plant and equipment 4 631,199 624,552 558,811 Rental equipment 4 797,655 783,080 710,589 Other assets 111,532 99,787 93,933 Deferred tax assets 1,208 1,203 1,379 Goodwill and intangible assets 3 591,550 469,124 469,468 Total assets $ 5,176,546 $ 4,868,492 $ 4,655,876 Liabilities Current liabilities Accounts payable and accrued liabilities 10 $ 602,779 $ 707,034 $ 695,966 Provisions 30,271 30,675 29,823 Deferred revenue and contract liabilities 352,689 331,946 337,881 Current portion of long-term debt 5, 7 149,941 149,910 — Income taxes payable 990 — 2,446 Total current liabilities 1,136,670 1,219,565 1,066,116 Deferred revenue and contract liabilities 23,908 23,585 21,588 Long-term lease liabilities 46,435 32,487 27,239 Long-term debt 5, 7 795,683 498,518 647,964 Post-employment obligations 30,138 28,774 28,060 Other long-term liabilities 3 35,692 — — Deferred tax liabilities 135,459 110,170 110,140 Total liabilities 2,203,985 1,913,099 1,901,107 Shareholders' equity Share capital 6 613,260 597,976 590,616 Contributed surplus 35,887 34,293 30,601 Retained earnings 2,315,170 2,309,784 2,129,546 Accumulated other comprehensive income 8,244 13,340 4,006 Total shareholders' equity 2,972,561 2,955,393 2,754,769 Total liabilities and shareholders' equity $ 5,176,546 $ 4,868,492 $ 4,655,876 See accompanying notes TOROMONT INDUSTRIES LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) 1 Toromont Industries Ltd. — Q1 2025 Interim Report
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Three months ended March 31 ($ thousands, except share amounts) Note 2025 2024 Revenue 13 $ 1,089,622 $ 1,016,349 Cost of goods sold 4 846,047 766,175 Gross profit 243,575 250,174 Selling and administrative expenses 145,090 143,589 Operating income 98,485 106,585 Interest expense 8 7,446 6,994 Interest and investment income 8 (11,179) (15,687) Income before income taxes 102,218 115,278 Income taxes 27,782 31,359 Net earnings $ 74,436 $ 83,919 Earnings per share Basic 9 $ 0.92 $ 1.02 Diluted 9 $ 0.91 $ 1.01 Weighted average number of shares outstanding Basic 9 81,311,867 82,309,309 Diluted 9 81,852,574 82,975,125 See accompanying notes TOROMONT INDUSTRIES LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) 2 Toromont Industries Ltd. — Q1 2025 Interim Report
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Three months ended March 31 ($ thousands) 2025 2024 Net earnings $ 74,436 $ 83,919 Other comprehensive (loss) income, net of income taxes: Items that may be reclassified subsequently to net earnings: Foreign currency translation adjustments (32) 618 Unrealized (losses) gains on derivatives designated as cash flow hedges (1,327) 13,774 Income tax recovery (expense) 345 (3,581) Unrealized (losses) gains on cash flow hedges, net of income taxes (982) 10,193 Realized gains on derivatives designated as cash flow hedges (5,516) (805) Income tax expense 1,434 209 Realized gains on cash flow hedges, net of income taxes (4,082) (596) Items that will not be reclassified subsequently to net earnings: Remeasurement (loss) gain on defined benefit plans (4,200) 23,395 Income tax recovery (expense) 1,113 (6,199) Remeasurement (loss) gain on defined benefit plans, net of income taxes (3,087) 17,196 Other comprehensive (loss) income (8,183) 27,411 Total comprehensive income $ 66,253 $ 111,330 See accompanying notes TOROMONT INDUSTRIES LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 3 Toromont Industries Ltd. — Q1 2025 Interim Report
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Share capital Accumulated other comprehensive income (loss) ($ thousands, except share amounts) Number Amount Contributed surplus Retained earnings Foreign currency translation adjustments Cash flow hedges Total Total shareholders' equity At January 1, 2025 81,300,574 $ 597,976 $ 34,293 $ 2,309,784 $ 4,988 $ 8,352 $ 13,340 $ 2,955,393 Net earnings — — — 74,436 — — — 74,436 Other comprehensive loss — — — (3,087) (32) (5,064) (5,096) (8,183) Total comprehensive income (loss) — — — 71,349 (32) (5,064) (5,096) 66,253 Exercise of share options 45,366 3,107 (498) — — — — 2,609 Share-based compensation plans — — 4,597 — — — — 4,597 Settlement of RSUs and PSUs 11,280 915 (2,505) — — — — (1,590) Effect of share compensation plans 56,646 4,022 1,594 — — — — 5,616 Business acquisition 110,447 12,800 — — — — — 12,800 Shares purchased for cancellation (204,900) (1,538) — (23,710) — — — (25,248) Dividends declared — — — (42,253) — — — (42,253) At March 31, 2025 81,262,767 $ 613,260 $ 35,887 $ 2,315,170 $ 4,956 $ 3,288 $ 8,244 $ 2,972,561 At January 1, 2024 82,297,341 $ 582,801 $ 27,346 $ 2,079,914 $ 2,409 $ (8,618) $ (6,209) $ 2,683,852 Net earnings — — — 83,919 — — — 83,919 Other comprehensive income — — — 17,196 618 9,597 10,215 27,411 Total comprehensive income — — — 101,115 618 9,597 10,215 111,330 Exercise of share options 111,645 8,414 (1,282) — — — — 7,132 Share-based compensation plans — — 4,537 — — — — 4,537 Effect of share compensation plans 111,645 8,414 3,255 — — — — 11,669 Shares purchased for cancellation (195,700) (599) — (11,940) — — — (12,539) Dividends declared — — — (39,543) — — — (39,543) At March 31, 2024 82,213,286 $ 590,616 $ 30,601 $ 2,129,546 $ 3,027 $ 979 $ 4,006 $ 2,754,769 See accompanying notes TOROMONT INDUSTRIES LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) 4 Toromont Industries Ltd. — Q1 2025 Interim Report
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Three months ended March 31 ($ thousands) Note 2025 2024 Operating activities Income from operations $ 74,436 $ 83,919 Items not requiring cash: Depreciation and amortization 63,279 47,811 Share-based compensation 2,971 2,735 Post-employment obligations 1,225 (1,200) Deferred income taxes (4,041) 2,675 Gain on sale of rental equipment and property, plant and equipment (5,315) (8,222) 132,555 127,718 Net change in non-cash working capital and other 12 (169,606) (45,486) Additions to rental equipment 4 (59,963) (69,845) Proceeds on disposal of rental equipment 13,933 18,406 Cash (used in) provided by operating activities (83,081) 30,793 Investing activities Additions to property, plant and equipment 4 (17,256) (32,941) Proceeds on disposal of property, plant and equipment 1,544 239 Business acquisition, net of cash acquired 3 (45,450) — Increase in other assets (27) (33) Cash used in investing activities (61,189) (32,735) Financing activities Issue of long-term senior debentures 5 300,000 — Financing fees (2,996) — Dividends paid 6 (39,127) (35,383) Net cash received on long-term incentive plan exercise/settlements 1,019 7,132 Shares purchased for cancellation 6 (25,248) (24,991) Payment of lease liabilities (2,708) (2,523) Cash provided by (used in) financing activities 230,940 (55,765) Effect of currency translation on cash balances (24) 305 Increase (decrease) in cash and cash equivalents during the period 86,646 (57,402) Cash and cash equivalents, at beginning of the period 890,815 1,040,757 Cash and cash equivalents, at end of the period $ 977,461 $ 983,355 Supplemental cash flow information (note 12) See accompanying notes TOROMONT INDUSTRIES LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 5 Toromont Industries Ltd. — Q1 2025 Interim Report
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1. DESCRIPTION OF BUSINESS Corporate Information Toromont Industries Ltd. (the "Company" or "Toromont") is a limited company incorporated and domiciled in Canada whose shares are publicly traded on the Toronto Stock Exchange ("TSX") under the symbol TIH. The registered office is located at 3131 Highway 7 West, Concord, Ontario, Canada. The Company operates through two business segments: the Equipment Group and CIMCO. The Equipment Group includes one of the larger Caterpillar dealerships by revenue and geographic territory, spanning the Canadian provinces of Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Québec, Ontario and Manitoba, in addition to most of the territory of Nunavut. The Equipment Group includes industry-leading rental operations and a complementary material handling business. CIMCO is one of North America's leading suppliers of thermal management solutions that enable customers to reduce energy consumption and emissions, use natural refrigerants, and monitor and control their operating environments autonomously. Both segments offer comprehensive product support capabilities. 2. MATERIAL ACCOUNTING POLICIES Basis of Preparation a) Statement of Compliance These interim condensed consolidated financial statements were prepared in accordance with International Accounting Standard ("IAS") 34 – Interim Financial Reporting . Accordingly, these interim condensed consolidated financial statements do not include all disclosures required for annual financial statements and should be read in conjunction with the audited annual consolidated financial statements of the Company as at and for the year ended December 31, 2024. These interim condensed consolidated financial statements were authorized for issue by the Board of Directors on April 30, 2025. b) Basis of Presentation These interim condensed consolidated financial statements were prepared on a historical cost basis, except for derivative instruments that have been measured at fair value. These interim condensed consolidated financial statements are presented in Canadian dollars, which is Toromont's functional currency, and all values are rounded to the nearest thousands, except where otherwise indicated. Certain comparative figures have been reclassified to conform to the current period's presentation. c) Material Accounting Policies The material accounting policies used in the preparation of these interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company's audited annual consolidated financial statements as at and for the year ended December 31, 2024. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 6 Toromont Industries Ltd. — Q1 2025 Interim Report
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Several amendments apply for the first time in 2025, but do not have an impact on the interim condensed consolidated financial statements of the Company. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. d) Use of Significant Accounting Estimates and Judgements The preparation of interim condensed consolidated financial statements in conformity with International Financial Reporting Standards ("IFRS") requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of revenue, expenses, assets, liabilities and accompanying disclosures. Significant estimates and judgements used in the preparation of these interim condensed consolidated financial statements are described in the Company's audited annual consolidated financial statements as at and for the year ended December 31, 2024. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. 3. BUSINESS COMBINATIONS AVL Manufacturing Inc. ("AVL") On January 31, 2025, the Company acquired 60% of the shares of AVL for consideration of $67.5 million cash plus the issuance of 110.4 thousand Toromont shares . In addition, the Company has committed to purchase the remaining 40% at various dates through to 2031. The initial purchase price was funded with cash on hand. AVL is a leader in the design and fabrication of power generation and storage enclosures. AVL has operations in Hamilton, Ontario and currently serves the data centre market across eastern North America. The Company has not yet finalized its determination of fair value of the assets acquired and liabilities assumed. The acquisition, while accretive, is not expected to have an overall material impact on Toromont's combined revenue, earnings or statement of financial position in the near-term. The acquisition is accounted for as a business combination with Toromont as the acquirer of AVL. The acquisition has been accounted for using the purchase method of accounting. Results from AVL have been included in the interim condensed consolidated statements of income and interim condensed consolidated statements of comprehensive income since the date of acquisition and is included in the Equipment Group. The following table summarizes the fair value of consideration paid on the acquisition date. Purchase price Cash consideration $ 67,500 Issue of Toromont common shares 12,800 Future purchase commitment consideration 34,509 Total $ 114,809 The purchase price allocation is preliminary and subject to adjustment on completion of the valuation process. The Company determined the preliminary fair values based on market information, independent valuations and management’s estimates. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 7 Toromont Industries Ltd. — Q1 2025 Interim Report
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Cash $ 24,050 Accounts receivable 30,921 Inventory 5,159 Other current assets 840 Property, plant and equipment 6,468 Right-of-use asset 17,324 Intangibles 118,694 Accounts payable and accrued liabilities (14,451) Deferred revenue (35,925) Right-of-use liability (17,382) Other long-term liabilities (310) Deferred income taxes (32,217) Net identifiable assets 103,171 Residual purchase price allocated to goodwill 11,639 Total $ 114,810 Accounts receivable represent gross contractual amounts receivable and reflect the best estimate at the acquisition date of the contractual cash flows expected to be collected. Goodwill is attributed to the existing AVL business, the assembled workforce and the combined strategic value to the Company's growth plan. The amount assigned to goodwill is not expected to be deductible for tax purposes. Acquisition-related costs were expensed as incurred and are included in selling and administrative expenses. The revenue and net income for the two-month period ended March 31, 2025 were not significant. Tri-City Equipment Rentals ("Tri-City") On September 9, 2024, the Company acquired the rental business and net operating assets of Tri-City, an industry leader in heavy equipment rentals with operations in Southwestern Ontario. The acquisition expands Toromont Cat's heavy rents business to better serve the Company's customer base. The Company acquired the business and net operating assets of Tri-City in exchange for cash consideration of $77.6 million, with $73.6 million paid on closing in 2024, $2.0 million paid in Q1 2025, and the remainder to be paid in Q3 2025. Toromont funded the transaction with cash on hand. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 8 Toromont Industries Ltd. — Q1 2025 Interim Report
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4. PROPERTY, PLANT AND EQUIPMENT AND RENTAL EQUIPMENT Property, plant and equipment Land Buildings Equipment Power generation Total Rental equipment Cost January 1, 2025 $ 196,768 $ 426,138 $ 420,737 $ 40,460 $ 1,084,103 $ 1,423,468 Additions 3,380 6,635 7,241 — 17,256 59,963 Business combination — 2,700 3,768 — 6,468 — Disposals (901) (937) (3,006) — (4,844) (24,763) Foreign currency translation adjustments — (4) (10) — (14) — March 31, 2025 $ 199,247 $ 434,532 $ 428,730 $ 40,460 $ 1,102,969 $ 1,458,668 Accumulated depreciation January 1, 2025 $ — $ 164,010 $ 256,096 $ 39,445 $ 459,551 $ 640,388 Depreciation expense — 4,549 10,896 75 15,520 36,777 Depreciation of disposals — (611) (2,683) — (3,294) (16,152) Foreign currency translation adjustments — (1) (6) — (7) — March 31, 2025 $ — $ 167,947 $ 264,303 $ 39,520 $ 471,770 $ 661,013 Net book value – March 31, 2025 $ 199,247 $ 266,585 $ 164,427 $ 940 $ 631,199 $ 797,655 Property, plant and equipment Land Buildings Equipment Power generation Total Rental equipment Cost January 1, 2024 $ 182,938 $ 370,334 $ 361,697 $ 40,138 $ 955,107 $ 1,263,079 Additions 4,249 11,143 17,549 — 32,941 69,845 Disposals — — (2,857) — (2,857) (39,834) Foreign currency translation adjustments 4 81 216 — 301 — March 31, 2024 $ 187,191 $ 381,558 $ 376,605 $ 40,138 $ 985,492 $ 1,293,090 Accumulated depreciation January 1, 2024 $ — $ 148,538 $ 229,309 $ 38,341 $ 416,188 $ 580,710 Depreciation expense — 3,723 9,160 275 13,158 31,223 Depreciation of disposals — — (2,835) — (2,835) (29,432) Foreign currency translation adjustments — 19 151 — 170 — March 31, 2024 $ — $ 152,280 $ 235,785 $ 38,616 $ 426,681 $ 582,501 Net book value – March 31, 2024 $ 187,191 $ 229,278 $ 140,820 $ 1,522 $ 558,811 $ 710,589 During the three months ended March 31, 2025, depreciation expense of $46.7 million was charged to cost of goods sold (2024 –$39.8 million), and $5.6 million was charged to selling and administrative expenses ( 2024 – $4.6 million). As at March 31, 2025 , the balance of assets under construction and not subject to depreciation was $13.9 million (2024 – $44.4 million). NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 9 Toromont Industries Ltd. — Q1 2025 Interim Report
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5. LONG-TERM DEBT March 31 December 31 March 31 2025 2024 2024 Senior debentures 3.71%, $150.0 million, due September 30, 2025 (1) $ 150,000 $ 150,000 $ 150,000 3.84%, $500.0 million, due October 27, 2027 (1) 500,000 500,000 500,000 3.76%, $300.0 million, due October 27, 2030 (1) 300,000 — — 950,000 650,000 650,000 Debt issuance costs, net of amortization (4,376) (1,572) (2,036) Total long-term debt $ 945,624 $ 648,428 $ 647,964 Less: current portion of long-term debt (149,941) (149,910) — Non-current portion of long-term debt $ 795,683 $ 498,518 $ 647,964 (1) Interest payable semi-annually, principal due on maturity. Effective March 21, 2025, the Company amended its existing $500.0 million committed revolving credit facility and extended the term of the agreement to March 2030, with a syndicate of financial institutions. Debt under this facility is unsecured and ranks pari passu with debt outstanding under Toromont's existing debentures. Interest is based on a floating rate, primarily bankers' acceptances and prime, plus applicable margins and fees based on the terms of the credit facility. No amounts have been drawn on the revolving credit facility as at March 31, 2025 , December 31, 2024 and March 31, 2024. Standby letters of credit issued utilized $43.7 million of the facility as at March 31, 2025 (December 31, 2024 – $40.8 million; March 31, 2024 – $39.1 million). On March 28, 2025, the Company issued senior unsecured debentures in an aggregate principal amount of $300.0 million (the "Debentures"). The Debentures mature in 2030 and bear interest at a rate of 3.76% per annum, payable semi-annually. The Debentures are unsecured, unsubordinated and rank pari passu with other unsecured, unsubordinated debt. 6. SHARE CAPITAL Normal Course Issuer Bid ("NCIB") The Company's NCIB program was renewed in September 2024. The current issuer bid allows the Company to purchase up to 8.2 million common shares during the 12-month period ending September 20, 2025. All shares purchased under the bid will be cancelled. The Company purchased and cancelled 204,900 common shares for $25.2 million (average cost of $123.22 per share, including transaction costs) during the three months ended March 31, 2025. The Company maintains an Automatic Share Purchase Plan ("ASPP") with a broker to enable the purchase of common shares under the NCIB during regular trading blackout periods. The volume of the purchases are determined by the broker based on share price and maximum volume parameters established by the Company prior to the commencement of each blackout period. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 10 Toromont Industries Ltd. — Q1 2025 Interim Report
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The Company purchased and cancelled 195,700 common shares for $25.0 million (average cost of $127.70 per share, including transaction costs) during the three months ended March 31, 2024. As at March 31, 2025 and 2024 there were no obligations for the repurchase of shares under the ASPP. Dividends Declared 2025 2024 Dividend Record date Dividend amount per share Payment date Total dividends declared ($ millions) Record date Dividend amount per share Payment date Total dividends declared ($ millions) Quarter 1 Mar. 7, 2025 $ 0.52 Apr. 4, 2025 $ 42.3 Mar. 8, 2024 $ 0.48 Apr. 4, 2024 $ 39.5 On April 30, 2025, the Board of Directors declared a quarterly dividend of $0.52 per common share, payable on July 3, 2025, to shareholders on record on June 6, 2025. 7. FINANCIAL INSTRUMENTS Financial Assets and Liabilities – Classification and Measurement The following table highlights the carrying amounts and classifications of certain financial assets and liabilities: March 31 December 31 March 31 2025 2024 2024 Other financial liabilities: Current portion of long-term debt $ 149,941 $ 149,910 $ — Long-term debt 795,683 498,518 647,964 Derivative financial instruments assets (liabilities), net: Foreign exchange forward contracts $ 6,766 $ 19,352 $ 2,880 Fair Value of Financial Instruments The fair value of derivative financial instruments is measured using the discounted value of the difference between the contract's value at maturity based on the contracted foreign exchange rate and the contract's value at maturity based on the comparable foreign exchange rate as at year-end under the same conditions. The financial institution's credit risk is also taken into consideration in determining fair value. The valuation is determined using Level 2 inputs, which are observable inputs or inputs that can be corroborated by observable market data for substantially the full term of the asset or liability, most significantly foreign exchange spot and forward rates. The fair value and carrying value of total long-term debt were as follows: March 31 December 31 March 31 2025 2024 2024 Total long-term debt: Fair value $ 958,911 $ 653,673 $ 633,975 Carrying value $ 950,000 $ 650,000 $ 650,000 NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 11 Toromont Industries Ltd. — Q1 2025 Interim Report
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The fair value was determined using the discounted cash flow method, a generally accepted valuation technique. The discounted factor is based on market rates for debt with similar terms and remaining maturities, and based on Toromont's credit risk. The Company has no plans to prepay these instruments prior to maturity. During the three months ended March 31, 2025 and 2024, there were no transfers between Level 1 and Level 2 fair value measurements. Derivative Financial Instruments and Hedge Accounting Foreign exchange contracts and options are transacted with financial institutions to hedge f o r e i g n - c u r r e n c y - d e n o m i n a t e d o b l i g a t i o n s r e l a t e d t o p u r c h a s e s o f i n v e n t o r y a n d s a l e s o f p r o d u c t s . A s a t March 31, 2025 , the Company was committed to: (i) US dollar purchase contracts with a notional amount of $402.0 million at an average exchange rate of $1.4121, maturing between April 2025 and March 2026; and (ii) US dollar sale contracts with a notional amount of $37.5 million at an average exchange rate of $1.4131, maturing between April 2025 and March 2026. Management estimates that a gain of $6.8 million (December 31, 2024 – gain of $19.4 million ; March 31, 2024 – gain of $2.9 million) would be realized if the contracts were terminated on March 31, 2025. Certain of these forward contracts are designated as cash flow hedges and, accordingly, an unrealized gain of $4.1 million (December 31, 2024 – unrealized gain of $10.9 million ; March 31, 2024 – unrealized gain of $1.5 million) has been included in other comprehensive (loss) income. These gains are not expected to affect net earnings as the amounts will be reclassified to net earnings within the next 12 months and will offset losses recorded on the underlying hedged items, namely f o r e i g n - c u r r e n c y - d e n o m i n a t e d accounts payable and accrued liabilities. Certain of these forward contracts are not designated as cash flow hedges but are entered into for periods consistent with foreign currency exposure of the underlying transactions. A gain of $2.7 million (December 31, 2024 – gain of $8.5 million; March 31, 2024 – gain of $1.4 million) on forward contracts not designated as hedges is included in net earnings, which offsets gains recorded on the f o r e i g n - c u r r e n c y - d e n o m i n a t e d items, namely accounts payable and accrued liabilities. 8. INTEREST INCOME AND EXPENSE The components of interest expense were as follows: Three months ended March 31 2025 2024 Credit facilities $ 564 $ 395 Senior debentures 6,335 6,219 Interest on lease liabilities 547 380 $ 7,446 $ 6,994 The components of interest and investment income were as follows: Three months ended March 31 2025 2024 Interest on conversion of rental equipment $ 1,579 $ 687 Interest income 9,600 15,000 $ 11,179 $ 15,687 NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 12 Toromont Industries Ltd. — Q1 2025 Interim Report
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9. EARNINGS PER SHARE Three months ended March 31 2025 2024 Net earnings available to common shareholders $ 74,436 $ 83,919 Weighted average common shares outstanding 81,311,867 82,309,309 Effect of dilutive securities 540,707 665,816 Weighted average common shares outstanding – diluted 81,852,574 82,975,125 Earnings per share: Basic $ 0.92 $ 1.02 Diluted $ 0.91 $ 1.01 For the three months ended March 31, 2025 , 348,508 outstanding share options with an average exercise price of $123.57 were considered anti-dilutive (exercise price in excess of average market price) and were excluded from the calculation. For the comparative period in 2024, 158,137 outstanding share options with an average exercise price of $125.11 were considered anti-dilutive and were excluded from the calculation. 10. SHARE-BASED COMPENSATION Share Option Plan A reconciliation of the outstanding options for the three months e nded March 31, 2025 and 2024 was as follows: 2025 2024 Number of options Weighted average exercise price Number of options Weighted average exercise price Options outstanding, January 1 1,458,651 $ 85.61 1,783,993 $ 78.50 Granted 192,443 122.02 158,137 125.11 Exercised (1) (45,366) 57.50 (111,645) 63.88 Forfeited (5,211) 107.56 (143,724) 92.23 Options outstanding, March 31 1,600,517 $ 90.71 1,686,761 $ 82.66 Options exercisable, March 31 931,299 $ 76.19 898,252 $ 67.31 (1) The weighted average share price at the date of exercise for the three months ended March 31, 2025 was $119.36 (2024 – $124.74). NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 13 Toromont Industries Ltd. — Q1 2025 Interim Report
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The following table summarizes share options outstanding and exercisable as at March 31, 2025: Options outstanding Options exercisable Range of exercise prices Number Weighted average remaining life (years) Weighted average exercise price Number Weighted average exercise price $36.65 – $39.79 99,700 1.0 $ 38.88 99,700 $ 38.88 $53.88 – $65.72 236,040 3.7 61.74 236,040 61.74 $66.22 – $72.95 404,004 4.8 70.99 323,068 70.50 $104.91 – $125.11 860,773 8.0 113.92 272,491 109.09 1,600,517 6.1 $ 90.71 931,299 $ 76.19 The fair values of the share options granted during 2025 and 2024 were determined at the time of grant using the Black-Scholes option pricing model with the following weighted average assumptions: 2025 2024 Fair value price per option $ 24.52 $ 27.86 Share price $ 122.02 $ 125.11 Expected life of options (years) 5.00 5.00 Expected share price volatility 22.0% 22.0% Expected dividend yield 1.70% 1.53% Risk-free interest rate 2.89% 3.70% Deferred Share Unit ("DSU") Plans A reconciliation of the cash-settled DSU plan for the three months ended March 31, 2025 and 2024 was as follows: 2025 2024 Number of DSUs Value Number of DSUs Value Outstanding, January 1 177,706 $ 20,266 191,320 $ 22,133 Dividend credits 750 85 715 82 Redemptions — — (16,321) (2,039) Fair market value adjustments — 47 — 2,369 Outstanding, March 31 178,456 $ 20,398 175,714 $ 22,545 The liability for cash-settled DSUs is recorded in accounts payable and accrued liabilities. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 14 Toromont Industries Ltd. — Q1 2025 Interim Report
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A reconciliation of the outstanding units of the equity-settled DSU plan for the three months e nded March 31, 2025 and 2024 was as follows: 2025 2024 Number of DSUs Number of DSUs Outstanding, January 1 62,674 33,360 Units taken or taken in lieu and dividends 17,759 17,812 Units transferred on settlement of RSUs and PSUs 13,283 — Outstanding, March 31 93,716 51,172 The cost of the equity-settled DSU plan is recorded in selling and administrative expenses with a credit to contributed surplus. Long-term Incentive Plan ("LTIP") A reconciliation of the outstanding units of RSUs and PSUs for the three months ended March 31, 2025 and 2024 was as follows: 2025 2024 RSUs PSUs RSUs PSUs Units outstanding, January 1 27,544 73,420 14,396 56,784 Granted 9,641 30,429 7,071 28,146 Reinvested dividends 118 310 54 213 LTIP settlement (7,002) (21,810) — — Forfeited (2) (692) — (11,028) Units outstanding, March 31 30,299 81,657 21,521 74,115 LTIP expense of $1.4 million (2024 – $1.1 million) was included in selling and administrative expenses with a credit to contributed surplus. 11. EMPLOYEE FUTURE BENEFITS Employee future benefits expense includes the following components: Three months ended March 31 2025 2024 Defined benefit plans $ 1,876 $ 1,881 Defined contribution plans 5,066 4,747 401(k) matched saving plans 116 101 $ 7,058 $ 6,729 NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 15 Toromont Industries Ltd. — Q1 2025 Interim Report
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12. SUPPLEMENTAL CASH FLOW INFORMATION Three months ended March 31 2025 2024 Net change in non-cash working capital and other: Accounts receivable $ 41,723 $ 90,504 Inventories (65,900) (138,285) Accounts payable and accrued liabilities (116,437) 51,722 Provisions (404) (446) Deferred revenue and contract liabilities (14,859) (23,153) Income taxes (23,874) (27,268) Derivative financial instruments 5,742 (3,857) Other 4,403 5,297 $ (169,606) $ (45,486) Cash paid during the period for: Interest $ 2,783 $ — Income taxes $ 58,355 $ 55,981 Cash received during the period for: Interest $ 10,161 $ 11,257 13. SEGMENTED INFORMATION The Company has two reportable segments: the Equipment Group and CIMCO as described in note 1, each supported by the corporate office. These segments are strategic business units that offer different products and services, and each is managed separately. The corporate office provides finance, treasury, legal, human resources and other administrative support to the segments and does not meet the definition of a reportable operating segment as defined in IFRS 8 – Operating Segments, as it does not earn revenue. The accounting policies of each of the reportable segments are the same as the material accounting policies described in the most recent annual audited consolidated financial statements. Segment performance is assessed based on operating income, which is measured differently than income from operations in the interim condensed consolidated financial statements. Corporate overheads are allocated to the segments based on revenue. Income taxes, interest expense, interest and investment income are managed at a consolidated level and are not allocated to the reportable operating segments. Current income taxes, deferred income taxes and certain financial assets and liabilities are not allocated to the segments as they are also managed on a consolidated level. The aggregation of the operating segments is based on the economic characteristics of the business units. These business units are considered to have similar economic characteristics including nature of products and services, class of customers and markets served and similar distribution models. No reportable segment is reliant on any single external customer. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 16 Toromont Industries Ltd. — Q1 2025 Interim Report
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The following tables set forth information by segment for the three months ended March 31, 2025 and 2024: Equipment Group CIMCO Consolidated Three months ended March 31 2025 2024 2025 2024 2025 2024 Equipment/package sales $ 460,995 $ 394,213 $ 42,126 $ 36,685 $ 503,121 $ 430,898 Rentals 106,390 95,854 — — 106,390 95,854 Product support 423,563 435,303 54,196 51,519 477,759 486,822 Power generation 2,352 2,775 — — 2,352 2,775 Total revenue $ 993,300 $ 928,145 $ 96,322 $ 88,204 $ 1,089,622 $ 1,016,349 Operating income $ 88,888 $ 98,756 $ 9,597 $ 7,829 $ 98,485 $ 106,585 Interest expense 7,446 6,994 Interest and investment income (11,179) (15,687) Income taxes 27,782 31,359 Income from operations $ 74,436 $ 83,919 Operating loss from rental operations for the three months ended March 31, 2025 was $0.7 million (2024 – operating income $2.3 million). 14. BUSINESS SEASONALITY Interim period revenue and earnings historically reflect variability from quarter to quarter due to seasonality. The Equipment Group has historically had a distinct seasonal trend in activity levels. Lower revenue is recorded during the first quarter due to winter shutdowns in the construction industry. The fourth quarter has typically been the strongest due in part to the timing of customers' capital investment decisions, delivery of equipment from suppliers for customer-specific orders and conversions of equipment on rent with a purchase option. This pattern is impacted by the timing of significant sales to mining and other customers, resulting from the timing of mine site development and access, and construction project schedules. This trend can also be impacted during periods of equipment supply constraints from suppliers. CIMCO has historically also had a distinct seasonal trend in results, as the timing of construction activity impacts revenue recognition under percentage-of-completion accounting. Revenue is typically lower during the first quarter as winter weather slows down construction schedules. Revenue increases in subsequent quarters as construction schedules ramp up. This trend can be impacted by governmental funding initiatives, supply constraints and the customer's timing of significant industrial projects. Sequential comparisons are also impacted by CIMCO's relatively high fixed-cost structure. Historically, inventories have increased through the year to meet the expected demand for higher deliveries in the third and fourth quarter. This trend can be impacted by equipment and parts availability. These seasonal sales trends also typically lead to accounts receivable to be at their highest level at year-end. Market and economic factors, local and global economic factors, and supply chain issues have affected and may continue to impact these trends. There can be no certainty that this historical seasonal pattern will recur in the future. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As at and for the three months ended March 31, 2025 ($ thousands, except where otherwise indicated) (Unaudited) 17 Toromont Industries Ltd. — Q1 2025 Interim Report